What Boston Developers Are Doing To Get Ahead As Sustainability Deadlines Loom

Mayor Michelle Wu's proposal to increase commercial property taxes is already generating intense criticism from Boston's real estate sector.

In March, Wu unveiled plans to file a home rule petition that would hike commercial property taxes as a way to protect residential properties from rising — and the city from budget cuts.

But critics told Bisnow this week that they believe the proposal is based on assumptions rather than facts and will hinder new development.

Rob Skinner, the market leader at Cushman & Wakefield's Boston office, said that the commercial property tax has always been roughly twice as high as the residential tax in the city, making it one of the highest rates in the country.

"I think it's a mistake," Skinner said about the proposal. "How much higher can you go, right?"

The tax hike is only the latest in a series of controversial policy changes that Wu has proposed in recent years — policy shifts that have flustered Boston's real estate sector.

Since she was elected in 2022, Wu has proposed several policies aimed at the development community, including a hike in the city's Linkage and Inclusionary Development policies — as well as a rent control proposal that have all made it more difficult to make projects pencil in the city. The…

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Only a third of the world’s largest real estate lenders have set decarbonization targets for their property loan books.

That is according to a new Bisnow analysis, which shows that among the 25 largest global property lenders, they hold $1T worth of real estate loans with no clear goal to reduce emissions.

Banks and other financial giants are much more likely to have set decarbonization targets for other carbon-intensive industries like oil, coal and aviation, Bisnow’s data collection revealed. Real estate is being comparatively overlooked, even though it accounts for about 40% of carbon emissions globally.

A report from the United Nations' Intergovernmental Panel on Climate Change last year cited real estate as a sector where urgent action is needed to avoid global temperatures rising more than the 1.5-degree target. Just half a degree above that will bring plant and animal extinctions, destructive weather events and sea levels that will destroy communities and cause mass migration. 

And while some in the debt world say it isn't lenders' job to push real estate owners to reduce carbon emissions, regulators are increasingly pushing lenders to improve reporting, and others argue they can play a vital part in an industrywide effort.

In a sector that relies so heavily on debt, they can have an outsized influence. 

“Banks are in a really powerful position,” said Emily Chadwick, the EMEA region head of ESG and risk advisory at JLL. “They have the ability to influence the decarbonization activities of the owners that they’re lending to. There is a necessity to work together.”

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